Tokenized cards will soon replace the usual
With the increase in the number of contactless payments, there are also cases of fraud. There are several solutions to the problem with fraud in the banking sector. One of them is transaction data encryption, in which public data is replaced with code. Actually, this is the case with NFC payments. Experts note that transactions using Google Pay and similar services are characterized by high reliability and maximum degree of protection.
By tokenization of bank cards means the banking data encryption platform developed by MasterCard, introduced in Russia in 2016. Thanks to technological innovation, customers of banks have been able to use Apple Pay, Samsung Pay and other services. Their peculiarity is that the data of debit cards is entered into the cloud storage and securely encrypted. Settlements are made due to emulation of the PayPass chip by NFC module of smartphone or similar gadget.
Most payment terminals around the world are equipped with contactless readers. Currently, ATMs with similar modules are being introduced, which allows you to withdraw money from the account without physical presence of plastic. At the same time, tokenization of cards is a competitive advantage of some financial institutions. In the future, it is expected that without tokenization it will be impossible to issue a banking product: any card can be connected to Google, Apple and Samsung Pay. Also, applications for contactless transactions are being improved: Samsung has instant transfers inside wallets.
Tokenized cards are impossible to hack
All information entering the system is protected by modern methods of cryptography. Tokenization involves replacing the bank card number on a snippet of reliable code. At the same time, not the card number, but encrypted information is attached to the smartphone (smart watch). Interestingly, the tokenized map by statistics is much more profitable than usual: the cost of re-releasing physical plastic carrier in case of damage is eliminated. The statistics also show that with the increase in the number of contactless terminals and ATMs, the number of transactions through NFC devices is growing every year. In general, the profitability of the card after tokenization increases by 10%.
At the same time, experts ambiguously assess the use of blockchain and cryptocurrencies in the process of payment tokenization. In particular, the ideology of digital assets must undergo several stages of transformation in order to enter the reality of the Russian banking system.
Ultimately, blockchain will be a banking ecosystem, but not for cryptocurrencies in the modern sense of the word. It will become the environment of reliable smart contracts that will replace paper workflow. Also in this environment StableCoins tied to fiat will function. This is very convenient for financial conglomerates physically located in different countries of the world:
now transfers within the structure will finally become truly free.